Unit 1 (intro to econ)
Limited oil supply, but having unlimited want can be understood as which economic concept
Scarcity
The law of demand is defined as what?
as prices rise, demand falls
as prices fall, demand rises
List two advantages and disadvantages of a partnership
Adv: division of responsibility, more to fund operation
Disadv: Division of profit, unlimited liability, argument conflicts, etc
The Federal Income Tax is what type of tax?
Progressive tax
Choices
Your decision to study for your exam tomorrow or party the night away is defined as what economic concept?
Choosing to study, you gave up potential for memories, social networking, and more at the party. What you lost out on is defined as?
Tradeoff; opportunity cost
The law of supply is defined as what?
As prices fall, supply falls
A corporation is ultimately owned by who?
Shareholders
Define proportional tax and provide an example that applies.
A tax rate that places the same percentage of taxation on all incomes.
(ex) sales tax
Define the substitution effect, what is it?
we are more prone to resort to substitutes when items become expensive
Command Economy
List the 5 factors that may shift supply.
Then draw a shift in a graph showing the following: an increase in technological capabilities
Input costs, technology, taxation, producer expectations, number of sellers
Graph would shift right, as supply would increase
Which business organization is the most common in the world?
Sole proprietorship
What is the difference between discretionary and mandatory spending?
Discretionary spending must be voted on while mandatory spending is mandated spending the goverment spends every year with no vote.
The law of diminishing marginal utility is defined as what?
The more that we have of something, the less satisfied we are with it
Draw a graph using the following guidelines:
- label both axes 0-100 (using metrics of 25)
- Label the y-axis radios, x-axis calculators
- Points: A(100 calc; 0 radios) B(50 calculators; 25 radios); C(0 Calc; 100 radios)
- Label points that are efficient, impossible, inefficient
- Calculate the opportunity cost from point A to B
Efficient: A, B, C
Inefficient: anything below the line
Impossible: anything above the line
Opp cost A--> B= 2 (loss/gain)--> 50/25=2
List the 5 factors that may shift demand.
Then draw a shift in a graph showing the following: a decrease in general income in an area
Population, income, advertising, compliments, trends
Graph would shift left as supply is decreasing
Compare and contrast an oligopoly market structure with a monopolistic competition structure. How are they different?
- easy entry, thousands of sellers, similar but different products, non-price advertising
Oligopoly:
- difficult entry, small amount of sellers, high control over price
Externalites: What are they?
Positive ones are funded by?
Negative ones are awarded with?
Economic side effects from an action
Subsidies; taxation
How is the budget debt different from the budget defecit?
Budget debt is the U.S. all time debt, while the deficit is only year spending to earnings.
Provide the four factors of production and relate them to car manufacturing
Land- steel, minerals, rubber
Labor- assembling parts, drilling tires, etc.
Capital- factory, wrenches, trolly jack, etc
Entrepreneurship- Honda, Toyota, Tesla, etc
Draw the following graph for Beats Pros using price as your y-axis and quantity as your x-axis.
Price: $100, Qd=20,000, Qs=5,000
Price: $200, Qd= 15,000, Qs=10,000
Price: $300, Qd= 10,000, Qs= 15,000
Price: $400, Qd= 5,000, Qs= 25,000
What is the approximate equilibrium quantity+price?
Draw a line through $400, is equilibrium taking place? If not, what is?
Eq Quantity~ 12,500
Equilibrium is not taking place at $400, rather a surplus as S>D
Provide the structure of corporations. How are they managed from top to bottom?
shareholders elected board of directors who elect CEO.
Public goods are hard to exclude anyone from obtaining. Private business couldn't enforce payments and wouldn't make money. Government taxes for these things to ensure all pay.
Diagram the circular flow model, including the 4 players.
Product market, factor market, households, businesses